Are you thinking about buying property in Spain? Despite the uncertainty over Brexit, surveys indicate that British buyers are still considering the move. According to The Statistical Information Centre of Notaries in Spain, British buyers make up 14% of all foreign property transactions and in 2018, bought 10 times as many properties compared with 2008.
There are a number of things to consider before buying property here in Spain and it is important that you seek the guidance of an English-speaking lawyer to take you through the process as smoothly as possible.
Raquel Perez of Perez Legal Group answers some popular questions asked by overseas buyers.
What is an NIE and do I need one to sell or buy property in Spain? The NIE (Numero de Identificacion de Extranjero) is the ID number in Spain for everyone who is not a Spanish citizen. Both EU and non-EU citizens can get issued an NIE. It’s not a fiscal number and you can have one but still remain a fiscal resident in another country. Do I need one? If you will be buying property in Spain, opening a bank account and for almost any other form you’ll need to complete.
Are there any extra expenses I need to factor in when buying a house in Spain? Buying property in Spain includes some extra costs in addition to the purchase price and you will typically need to factor in an extra 10-15%. If you are buying a home to live in, there will be different costs to the purchase of one for commercial use.
There are differences too between buying a new build and a property for resale (one that has exchanged hands previously). If you are purchasing a new build, it will involve the payment of VAT (IVA in Spain) which is 10%, plus 1.5% Legal Documentation Tax. For resales properties, you are liable for the transfer tax which depends on the value of the property; 8% for properties below €400,000 and up to 10% on properties over €700,000.
Then you have the fees which include the Notary (to prepare the title deeds and to witness the signatures), Land Registry (Registro de la Propiedad), legal and real estate fees. If you are transferring money to Spain, you may also incur some fees.
Can I hold a property with a deposit in Spain? It is quite common to offer the owner a deposit to remove the property from the market. If you are happy with the physical features of the property and have gone through the initial legal checks. Usually you can be expected to pay 10% of the value of the property and if you decide to pull out of the deal then you lose the deposit.
You should never hand over a deposit unless it is accompanied with clear and written guidelines, detailing the terms of sale. Never hand any deposit directly to a private vendor.
I am thinking of buying land and building a house, are there any legal complications? Buying land in Spain and then building your home can be a cheaper option but buying land also has complications. Spanish land laws are complex and it is vital that you buy the right plot of land to ensure you can gain planning permission.
Should I consider a Spanish mortgage? If you are buying a property in Spain, it is worth considering a mortgage with a Spanish bank. Interest rates in Spain can vary but can be lower than in the UK. If you are buying a new build, check with the developer who may already have an agreement with a Spanish bank, but if not, it is worth shopping around for the best deal.
Do I need to have a real estate agent to purchase a property? You don’t need to go through a real estate agent to buy property in Spain, but it is vital that you have a good and trustworthy lawyer to take care of the details.
Would you like to learn more about buying property here in Spain?
Download our FREE e guides, which take you through the process of buying property, written by Raquel Perez.